Technological standardization is an essential prerequisite for the implementation of new technologies:
The interdependencies of these technologies require common rules (&quotstandardization&quot) to ensure compatibility.
Though standardization is prevalent in practically every sector of industrialized economies, its macroeconomic implications
have not been analyzed so far. Using data on standardization, we are able to measure the industry-wide adoption of new
technologies and analyze their impact on macroeconomic variables. First, our results show that new technologies
diffuse slowly and generate a positive S-shaped reaction of output and investment. Before picking up permanently, total
factor productivity temporarily decreases, implying that the newly adopted technology is incompatible with the incumbent
technology. Second, standardization reveals information about future movements of macroeconomic aggregates as
evidenced by the positive and immediate reaction of stock market variables to the identified technology shock.
Standardization triggers a lengthy process of technology implementation whose aggregate effects only materialize after years;
however, forward-looking variables pick up these developments on impact.

Recently, the notion of occasionally binding constraints has been used in macroeconomic models to generate
threshold and amplified financial accelerator effects in order to stress the relevance of financial frictions
- in particular for emerging market business cycles. As much as these models have to use global solution
techniques, empirical models have to resort to non-linear estimation techniques to capture asymmetries.
Using a threshold vector autoregression approach, I analyze the effect of shocks to the country risk premium
in different regimes which are interpreted as states of the economy where collateral constraints bind to a
different degree. Amplification coefficients which measure the non-linearity of responses are computed across
various emerging market economies. As a first finding, the results show that there is large heterogeneity in
the responses and the size of amplification coefficients across countries. In a second step, it is found that
cross-country differences can be associated with characteristics such as liability dollarization or external
leverage. This finding thus validates the underlying conceptual framework where vulnerability at the country
level is assumed to depend on structural features and the degree of financial frictions. Third, this paper shows
that both a debt-deflation mechanism which causes asset price spirals as well as pecuniary externalities stemming
from exchange rate depreciation can lead to non-linearities; however, the former is associated with a higher
likelihood of leading to regime switches.

The recent financial crisis has demonstrated the strong cross-border linkages that led to an unprecedented freeze
in bank funding markets. This paper considers whether greater diversification of foreign funding across countries
can make banks more resilient against adverse shocks. To date, most studies of banks' concentration risks during
the crisis have focused on the asset side of their balance sheet. In this paper, we build a model of
heterogeneous banks that are constrained in their ability to diversify away certain funding risks due to
fixed costs. There is a trade-off between a high degree of diversification and the costs that such diversification
entails. Heterogeneity in bank size and profitability translates into different relative fixed costs. Using
detailed balance sheet data for all UK-resident banks, we show that banks' ability to weather the rise in funding
costs during times of financial stress is related to their size and profitability. Conditional on banks' reliance
on domestic core deposit funding, better diversified foreign funding mitigates the impact of a global shock. We
specifically take into account the different dimensions of diversification. Along the extensive margin, banks are
more resilient against shocks if they fund from a larger number of foreign sources. With regards to the intensive margin,
an analysis of the specific correlation patterns of different funding sources is desirable as simple measures of
concentration risk fall short of capturing the high degree of interconnectedness that characterizes foreign funding markets.

No Double Standards: Quantifying the Impact of Standard Harmonization on Trade
[pdf]

Product standards are omnipresent in industrialized societies. Though standardization can be beneficial for domestic producers, divergent product standards have been categorized as a major obstacle to international trade. The harmonization of standards can be a powerful trade policy tool, but little is known about the mechanisms through which standard harmonization translates into economic outcomes. This paper quantifies the effect of standard harmonization on trade flows and characterizes the extent to which it changes the cost and demand structure of exporting. Using a novel and comprehensive database on cross-country standard equivalences, we identify standard harmonization events at the document level. Our results show that the introduction of new harmonized standards entails adaption costs and creates an entry barrier, while simultaneously raising the demand for products subject to harmonization. The latter effect dominates, thus increasing overall trade flows.

International Banking and Liquidity Risk Transmission: Evidence from France [link]

The Banque de France contribution analyzes the effect of liquidity risk on domestic and foreign lending, credit and
intragroup funding by French banking groups. The paper finds that a higher core deposit ratio, a higher commitment ratio,
and a low ratio of illiquid assets are associated with higher growth of certain types of lending during times of liquidity risk.
These effects are mitigated when public liquidity is accessed, thus confirming that public liquidity provision was conducive
to maintaining lending growth. Most importantly, it finds that the quantitative importance of liquidity risk is more pronounced
for foreign lending, which may suggest that the particular banking model of French banks and the strong domestic retail sector
contributed to the stability of domestic credit.

International Banking and Cross-Border Effects of Regulation: Lessons from France [link]

As part of the International Banking Research Network, the Banque de France contribution to the research project on prudential policy
spillovers concentrates on the “outward” adjustment of French banks’ cross-border lending. We consider both adjustment of cross-border
lending to foreign (“destination-country”) and French (“home-country”) regulation and investigate differences between financial and non-financial
counterparties. For some regulatory measures, we find that French banks increase their cross-border lending growth in response to
regulatory tightening abroad—presumably because they are not subject to these regulatory changes. All in all, we do not find particularly
large quantitative adjustments to changes in foreign regulatory policies. Lastly, we find that balance sheet variables are important for
the adjustment of crossborder lending growth in response to French regulatory policy changes.

International Spillovers of Monetary Policy: Evidence from France and Italy

In this paper we provide empirical evidence on the impact of US and UK monetary policy changes on credit supply of banks operating in Italy and
France over the period 2000--2015, exploring the existence of an international bank lending channel. Exploiting bank balance sheet
heterogeneity, we find that monetary policy tightening abroad leads to a reduction of credit supply at home, in particular for US monetary policy
changes. Our results show that USD funding plays an important role in the transmission mechanism, especially for French banks which rely to a
larger extent on USD funding. We also show that banks adjust their euro and foreign currency lending differently, thus implying that funding
sources in different currencies are not perfect substitutes. This is especially the case when tensions in currency swap markets are high, thus
resulting in costly cross-currency funding.